July 8, 2013

Separation of Powers

Fresenius sought a DJ against Baxter that backfired, at least at first. The
district court found the patent (5,247,434)
valid and infringed. The CAFC affirmed. Meanwhile, in reexamination, the PTO
found '434 invalid. The CAFC affirmed the PTO, even as the district court
entered an infringement finding against Fresenius. To resolve the conundrum, the
CAFC 2-1 sided with the PTO over its own court system. The dissent finds this a
breach in the constitutional separation of powers.

The court today authorizes the Patent and Trademark Office, an
administrative agency within the Department of Commerce, to override and
void the final judgment of a federal Article III Court of Appeals. The panel
majority holds that the entirety of these judicial proceedings can be
ignored and superseded by an executive agency's later ruling.

This holding violates the constitutional plan, for "Judgments, within the
powers vested in courts by the Judiciary Article of the Constitution, may
not lawfully be revised, overturned or refused faith and credit by another
Department of Government." Chi. & S. Air Lines, Inc. v. Waterman S.S.
Corp., 333 U.S. 103, 113 (1948). This holding violates the rules of
finality, for judgments of Article III courts are "final and conclusive upon
the rights of the parties," Gordon v. United States, 117 U.S. 697,
702 (1864); Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 226
(1995) (same).